St Louis Mortgage Blog

St Louis Home Mortgage and Refinancing News -

News:  About half of homeowners to have negative equity by 2011

Analysts at Deutsche Bank say that the number of homeowners whose home value is less than what they owe on mortgage loans will double to 48% by 2011; currently 26% of homeowners have negative home equity.

"We project the next phase of the housing decline will have a far greater impact on prime borrowers," said Karen Weaver and Ying Shen, analysts at Deutsche Bank.

Among prime loans - which conform to underwriting and size guidelines of Fannie Mae and Freddie Mac - about 41% will be "underwater" by the first quarter of 2011 from 6% at the end of the first quarter of 2009.

As for prime Jumbo loans, about 26% will be underwater by 2011. "The impact of this is significant given that these markets have the largest share of the total mortgage market outstanding," said the Deutsche Bank analysts.

Among subprime loans, 61% will be underwater by 2011. The drop in home prices is leading to negative home equity and incentivizing borrowers to walk away from their mortgage commitments.

In regions such as Las Vegas and parts of Florida and California about 90% of homeowners are likely to see negative home equity by 2011. "For many, the home has morphed from piggy bank to albatross," the analysts said.

All St. Louis mortgage and real estate news sponsored by LibertyLendingConsultants.com and are not necessarily the views of Liberty Lending Management or owners.  Consumers: Enjoy personalized service for your next home mortgage or refinancing loan by calling 314-698-4092 and ask for Steve Swan or Doug Stahlschmidt.

St Louis Home Mortgage and Refinancing News -

News:  More support for Fannie and Freddie

The U.S. Treasury said in a Christmas Eve press release that it would provide unlimited capital to Fannie Mae and Freddie Mac for the next three years, effectively opening its checkbook  to the government-controlled companies in a bid to reassure investors in their debt. 

After December 31, the Treasury would need the consent of Congress to make such changes.  So, it's no surprise it moved a week before its authority to change the terms of its agreements with the companies that were set to expire. 

So far, the government has pumped $60 billion into Fannie Mae and $51 billion into Freddie Mac.  The new terms announced yesterday would allow the cap on Treasury's support to increase by the amount of the total net loss the firms experience over the next three years, beginning on January 1, 2010.

The cap in place at the end of 2012 would apply thereafter.  Of course, the changes come come as Fannie's and Freddie's regulator, the Federal Housing Finance Agency, on Thursday approved multimillion pay packages for the firms'
top executives.

The pay announcement and the sweeping increase in the government's commitment to backstop the companies are certain to stoke anger from the companies' critics on Capitol Hill. 

"The Obama administration's decision to write a blank check with taxpayer dollars for the continued bailout of Fannie Mae and Freddie Mac is appalling," said Rep. Scott Garrett (R., N.J.). 

He argued the timing of the announcement, on Christmas Eve, was "designed to try and sneak the bailout by the taxpayers."

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All St. Louis mortgage and real estate news sponsored by LibertyLendingConsultants.com and are not necessarily the views of Liberty Lending Management or owners. 

Good news for consumers:  Take advantage of the home buyer's tax credit for your next home loan by calling 314-698-4092.  Ask for Steve Swan or Doug Stahlschmidt.

St Louis Home Mortgage and Refinancing News -

If you have been watching the financial news for the past 4 weeks, you've probably seen mortgage rates rise to it's highest level since the first week of November.

Bankrate.com reported that "mortgage rates are advancing along with rates and yields on other long-term debt.  For example, the yield on the 10-year U.S. Treasury is up more than 40 basis points compared to four weeks ago. Over the same period, the benchmark 30-year fixed-rate mortgage has risen 24 basis points."

Surprisingly, home resales seemed to have surged in November although prices were down.  To the contrary, new home sales plummeted as reported by news blog StLouisRefinancingGroup.com most recently.

Most analysts readily agree that fewer homeowners are purchasing now due to the home buyer's tax credit deadline being extended till April 2010.  As expected, mortgage brokers and lenders are now preparing for the large influx of applications after the new year.

But how is this good news for home shoppers?  Since fewer consumers are applying for St. Louis refinancing loans at this particular time and even fewer homeowners are purchasing new homes, mortgage brokers have more time on their hands to deliver even more personalized service.

Those wanting to enter the home market should take this into consideration as lenders will be much busier as thousands will try to take full advantage of the home buyer's tax credit marathon by April 2010.

Liberty Lending Consultants are available to help guide you in the right direction by selecting the best home mortgage or refinancing loan to help meet your financial goals.  Call Liberty Lending at 314-698-4092 and ask for Steve or Doug.